Is the property you are working on insured?
Ever wonder what would happen if the house your were working on burned to the ground. Would you get paid for the work you did up to when the fire occurred? Would you have to redo your work without additional compensation?
Would the materials you supplied be insured?
When you are working for a general contractor or a business owner who is building a new building there is usually a builder's risk policy that insures the property. Some people refer to this type of policy as Course of Construction.
A builders risk policy is a special policy with one main purpose in mind; To make sure the funds are available so the project gets completed. Anyone who has contributed labor or materials for the project will be covered under the same policy. In effect all contractors who have not yet been paid by the general contractor are essentially an insured under the policy. If the building owner has paid all of the contractors the insurance proceeds puts him back in the same financial position that was present before the loss. This insures the project does not run into financing or investor problems because of an insured loss.
If you are working for a homeowner or a business owner doing renovations or additions there is far greater risk the owner has not taken out a special insurance policy to insure the property while it is under construction. This leaves you vulnerable.
Most home owners and small business owners have insurance on their buildings but some fail to get permission for construction. As a result they may be uninsured. This can cause some serious gaps in insurance. If the building owner or home owner has an uninsured loss it is very difficult for you to recover your losses from the owner because there is nothing to put a lean on and the owner is now in serious financial distress.
Even when the building owner has permission for construction and his policy is effective your labor and materials may not be covered by the owner's policy.
You can protect your exposure to these situations by having an installation floater which is discussed in a separate post in this blog.
Need more info? Garth Merryweather - 306-821-1620
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